m_c,
You're original circuit is absolutely fine bar the low reverse breakdown voltage spec for most LEDs (which may be very conservative in practice). As suggested previously this could be overcome by putting a standard diode such as the ever-popular 1N4148 (reverse breakdown voltage = 100v) in series with the LED. Just spec the resistor for 2 lots of diode volt drop and make sure the transistor can handle the combined current from the switched 24v circuit and the LED.

Rob,
I think the point you are missing is that the 24v line in the diagram in post #1 is NOT a supply but is an input to a controller which has a pull-up resistor to 24v. When the probe contacts close, the transistor pulls both the controller input and the LED cathode to ground. When the contacts are open the diode action of the LED prevents the controller input being connected to the 5v supply.

I'm in the process of converting my machine from microswitches to inductive sensors for the limit switches and will use diodes in a similar way to prevent the un-triggered sensor outputs (pulled up to the 12v supply by an internal 10k resistor) connecting to the breakout board inputs (pulled up to the 5v supply by an internal 10k resistor).